AVEO Oncology Reports Full Year 2014 Financial Results

“At the beginning of 2015, AVEO implemented several important changes
designed to maximize the value of our portfolio of clinical stage
products,” said Michael Bailey, president and chief executive officer.
“Our approach to realizing this value is to leverage biomarker insights,
including the promising new NRP-1 findings for tivozanib in metastatic
colorectal cancer, and our demonstrated ability to advance our assets
through partnerships. In support of these efforts, we have streamlined
our organization to better align it with our clinically focused
strategic needs going forward, extending our financial runway into the
third quarter of 2016. We look forward to a productive 2015 as we work
toward making progress in executing our strategy.”

Recent Highlights

Announced Presentation of Phase 2 Study Analysis Showing Longer PFS
with Tivozanib versus Bevacizumab in Low Serum NRP-1 Patients with
Advanced CRC – Today, AVEO announced the presentation of final
results, including a predefined biomarker analysis, from the BATON-CRC
study, a randomized Phase 2 clinical trial of modified FOLFOX6
combined with tivozanib or bevacizumab in metastatic colorectal cancer
(CRC). The presentation, titled “Neuropilin-1 as a potential biomarker
of progression-free survival benefit for tivozanib + mFOLFOX6 versus
bevacizumab + mFOLFOX6 in metastatic colorectal cancer: post-hoc
biomarker analysis of BATON-CRC Phase 2 trial,” will be presented in a
poster session today at the American Association for Cancer Research
(AACR) Tumor Angiogenesis and Vascular Normalization Conference,
taking place March 5-8, 2015, in Orlando, FL.

Named Michael P. Bailey as President and Chief Executive Officer –
In January 2015, AVEO announced that its board of directors appointed
Michael P. Bailey as the Company’s president and chief executive
officer and has elected Mr. Bailey as a director. Mr. Bailey succeeds
Tuan Ha-Ngoc, who was named chairman of AVEO’s board of directors.

Announced Corporate Restructuring – In January 2015, AVEO
announced the elimination of its internal research function, as well
as certain corporate support positions, to align resources with the
Company’s future strategic plans, focusing on advancement of its
pipeline in the clinical setting and reducing corporate expenses. AVEO
expects that the related severance and outplacement charges of
approximately $4.5 million incurred in connection with the
restructuring will be included in its results of operations for the
first quarter of 2015. The reduction in force is expected to reduce
compensation expenses annually by approximately $6 million and will
further reduce AVEO’s facilities requirements, by more than 80% of its
current space, including the elimination of lab and vivarium needs.
The Company announced today that it will exit its current facility by
the end of May 2015.

Named Michael N. Needle, M.D. as Chief Medical Officer – In
January 2015, AVEO announced the appointment of Michael N. Needle,
M.D., to the position of chief medical officer. In this role, Dr.
Needle, a board certified hematologist/oncologist, will take a
leadership role in evaluating and implementing clinical development
strategies for advancement of the Company’s proprietary and partnered
clinical-stage programs.

Received Confirmation of Eligibility for Submission of a Tivozanib
Marketing Authorization Application (MAA) to the European Medicines
Agency – In January 2015, AVEO announced that, in response to
submission of a letter of intent, it has received written confirmation
from the European Medicine Agency (EMA) that tivozanib is eligible for
submission of an application for a European Union Marketing
Authorization under the Agency’s centralized procedure. AVEO intends
to evaluate the decision to submit a tivozanib Marketing Authorization
Application (MAA) in Europe for the treatment of RCC. Confirmation of
eligibility for submission is not predictive of the EMA’s approval of
a MAA.

Entered into Research and Exclusive Option Agreement with
Ophthotech for Tivozanib for the Treatment of Ocular Diseases – In
November 2014, AVEO announced its entry into a research and exclusive
option agreement with Ophthotech Corporation, under which it has
provided Ophthotech an exclusive license to investigate the potential
of tivozanib outside of Asia for the potential treatment of
non-oncologic diseases of the eye. The agreement enables AVEO to
potentially realize additional value for tivozanib in an indication
outside of cancer, while retaining oncology rights for further
development through additional potential partnerships.

Under the terms of the agreement, if Ophthotech exercises its option,
AVEO would be eligible to receive, from Ophthotech, a total of up to
$105.5 million in option fees and milestone payments, based on
achievement of specified development, regulatory, sales and business
goals, in addition to tiered, double digit royalties, up to the
mid-teens, on net sales. This includes an upfront option fee of $500,000
received in the fourth quarter of 2014. Ophthotech is responsible for
all research and development activities and costs, and upon exercise of
its option, further development and commercialization activities and
costs for tivozanib ocular indications. A percentage of all upfront,
milestone and royalty payments received by AVEO are due to Kyowa Hakko
Kirin as a sublicensing fee.

Full Year 2014 Financial Highlights

AVEO ended 2014 with $52.3 million in cash and cash equivalents.

Total collaboration revenue for 2014 was approximately $18.1 million
compared with $1.3 million for 2013. The increase was primarily due to
recognition of an additional $13.7 million of previously deferred
revenue as a result of the modification of the Company’s arrangement
with Biogen Idec. In addition, the Company recognized an additional
$3.1 million of collaboration revenue in connection with the change in
the estimated period of performance associated with the Company’s
collaboration with Astellas as a result of the termination of the
agreement in August 2014.

Research and development (R&D) expense for 2014 was $38.3 million
compared with $68.5 million for 2013. The decrease in R&D expense was
primarily due to a reduction in personnel-related expenses following
AVEO’s June 2013 strategic restructuring as well as a decrease in
external clinical trial, research, and medical affairs costs
associated with reduced tivozanib clinical trial activity, and a
decrease of costs relating to the manufacturing of ficlatuzumab, which
was completed in 2013.

General and administrative (G&A) expense for 2014 was $18.6 million
compared with $28.7 million for 2013.The decrease in G&A expense was
primarily due to a reduction in personnel-related expenses following
AVEO’s June 2013 strategic restructuring as well as a decrease in
marketing and consulting costs due to termination of work related to
tivozanib pre-commercialization activities.

Restructuring and lease exit expense for 2014 was $11.7 million
compared with $8.0 million for 2013. The expenses incurred during 2014
relate to costs associated with partially vacating and subsequently
terminating the agreement for the Company’s leased space. The expenses
incurred during 2013 relate to severance and employee benefits
incurred as part of the June 2013 strategic restructuring.

Net loss for 2014 was $52.7 million, or a net loss of $1.01 per basic
and diluted share compared with net loss of $107.0 million or a net
loss of $2.10 per basic and diluted share for 2013.

Updated Financial Guidance

Based on its current operating plan, the Company expects its $52.3
million in cash resources as of December 31, 2014 will be sufficient to
fund operations into the third quarter of 2016.

About AVEOAVEO Oncology (NASDAQ:AVEO) is a
biopharmaceutical company committed to developing targeted therapies
through biomarker-driven insights to provide improvements in patient
outcomes where significant unmet medical needs exist. AVEO’s proprietary
Human Response Platform™ has delivered unique insights into cancer and
related disease biology that AVEO is seeking to leverage in the clinical
development strategy of its therapeutic candidates. For more
information, please visit the company’s website at www.aveooncology.com.

Cautionary Note Regarding Forward-Looking StatementsThis
press release contains forward-looking statements of AVEO within the
meaning of The Private Securities Litigation Reform Act of 1995 that
involve substantial risks and uncertainties. All statements, other than
statements of historical facts, contained in this press release are
forward-looking statements. The words “anticipate,” “believe,”
“estimate,” “expect,” “intend,” “may,” “plan,” “target,” “potential,”
“objective,” “could,” “should,” “seek,” or the negative of these terms
or other similar expressions, are intended to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. These forward-looking statements include, among
others, statements about: the Company’s strategy for future growth; the
Company’s strategy and ability to rebuild shareholder value; the
Company’s estimated restructuring charges and realized cost reductions
from the reduction in its facilities requirement; anticipated benefits
from the restructuring; statements about payments that may be received
by AVEO under both the option agreement and any future license agreement
with Ophthotech; AVEO’s estimates regarding its financial runway; and
the Company’s future growth and long-term success. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements that AVEO makes
due to a number of important factors, including risks relating to:
AVEO’s ability to successfully implement and manage its restructuring
and obtain the benefits it expects to derive from the reduction in its
workforce and internal research functions; AVEO’s ability to execute on
its business strategy and enter into and maintain new strategic
partnerships and collaboration agreements, including the risk that
Ophthotech does not elect to exercise its option to enter into a license
agreement with AVEO to further develop tivozanib; the risk of any
breach, event of default under, or acceleration of the payment terms of
AVEO’s loan agreement with Hercules; AVEO’s ability to successfully
enroll and complete clinical trials of its product candidates; AVEO’s
ability to demonstrate to the satisfaction of the FDA, EMA or other
equivalent foreign regulatory agencies, the safety, efficacy and
clinically meaningful benefit of its product candidates; AVEO’s ability
to achieve and maintain compliance with all regulatory requirements
applicable to its product candidates; AVEO’s ability to obtain and
maintain adequate protection for intellectual property rights relating
to its product candidates and technologies; developments and expenses
related to AVEO’s ongoing shareholder litigation and SEC inquiry; AVEO’s
ability to raise the substantial additional funds required to achieve
its goals; unplanned capital requirements; adverse general economic and
industry conditions; competitive factors; and those risks discussed in
the section titled “Risk Factors” included in AVEO’s most recent Annual
Report on Form 10-K, its quarterly reports on Form 10-Q and in its other
filings with the SEC. The forward-looking statements in this press
release represent AVEO’s views as of the date of this press release.
AVEO anticipates that subsequent events and developments will cause its
views to change. However, while AVEO may elect to update these
forward-looking statements at some point in the future, it specifically
disclaims any obligation to do so. You should, therefore, not rely on
these forward-looking statements as representing AVEO’s views as of any
date subsequent to the date of this press release.